Hard money ‘wolf’ lender charged with conspiracy, fraud

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

UNIVERSITY PLACE, Wash. — A hard money lender known for his predatory practices on down-and-out homeowners was arrested Tuesday and charged in U.S. District Court.

Emiel A. Kandi is charged with conspiracy, making false statements on a loan application and mail fraud. According to a release issued by U.S. District Attorney Jenny Durkan, Kandi submitted false information to obtain as many 19 home mortgage loans. Kandi would loan out “hard money” to desperate borrowers, setting up loans with predatory terms such as quick repossession and exorbitant fees, allowing him to take over the home if the borrower was late on even a single payment.

In a Seattle Times interview, Kandi reportedly said he charged up to 45 percent interest on his loans, and took individuals’ property the moment they failed to comply with the rigid terms of this loans. Many terms also included inflated commission payments to Kandi.

The Times reported struggling homeowners went to Kandi — always well-dressed and fast-talking — when they were turned down for standard bank loans.

According to the indictment, Kandi submitted false information on his borrowers’ behalf, including their employment, salary and intention to live in the house. He also skirted mortgage lending standards by submitting applications for commercial loans. Paperwork submitted by Kandi was designed to make his actions appear legitimate and ensure they would meet federal lending standards.

Many of the loans were processed by Pierce Commercial Bank and were insured by the Federal Housing Administration (FHA), a unit within the federal Department of Housing and Urban Development (HUD).

Mail fraud is punishable by up to 20 years in prison and a $250,000 fine. Conspiracy is punishable by up to five years in prison and a $250,000 fine. Making false statements in a loan application is punishable by up to 30 years in prison and a $1 million fine.

1 Comment

Charging 45 percent is a very high interest and borrowers won't really be able to pay it back. They're like giving away their property the moment they take out a loan. This may affect hard money lenders in general but it's good that the perpetrators are in the jail now.